Pipeline boss taking oil spills seriously

CALGARY - Canada's pipeline boss says he expects two recent leaks in Alberta will provide ammunition to opponents of the Keystone XL and Northern Gateway projects.

An Enbridge (TSX:ENB) pumping station spilled 230,000 litres of heavy crude near Elk Point northeast of Edmonton this week. And a pipeline owned by Plains Midstream Canada leaked up to 475,000 litres of light sour crude into the Red Deer River in central Alberta on June 7.

Industry figures show at least 3.4 million litres of hydrocarbons have leaked from pipelines in the province every year since 2005.

That is likely something that environmental groups trying to stop both projects will latch on to, suggests Doug Bloom, chairman of the Canadian Energy Pipeline Association and president of Spectra Energy.

"I think any kind of incident, no matter how small, is going to be picked up by those who are going to oppose any kind of energy development, and they'll try and use it as a rationale for not doing it," Bloom said Thursday after attending a Chamber of Commerce luncheon.

"Any spill right now is going to be bad timing. There's such a focus now with Gateway and with Keystone XL and other projects going through regulatory review. Any time there's any kind of an incident no matter how large or how small, it's going to be prominent."

Bloom said gone are the days when pipeline companies rarely made the news and operated "under the radar."

"Over the last year or two, like it or not, we seem to find ourselves prominent in the news and in some cases for the wrong reasons."

The U.S. government is reviewing TransCanada's (TSX:TRP) US$7.6-billion Alberta-to-Texas Keystone proposal in its entirety after rejecting it in January because Republican manoeuvring to speed the process didn't allow enough time to properly weigh a new Nebraska route.

Agencies, organizations and members of the public have until the end of July to comment on possible environmental issues, ways to lessen those impacts and the scope of the study.

U.S. consul general Laura Lochman, who was also at the luncheon, doesn't believe the review will look at outside factors when it comes to Keystone XL.

"The Keystone decision is looking just at that specific project. We already have the previous file and that will be brought to bear on that reapplication for the Keystone XL pipeline," she said.

Lochman noted that Canada now provides 24 per cent of U.S. oil imports. Increasing that percentage would have a positive effect on American energy security, she said.

Enbridge is proposing to build a pipeline that would stretch from Alberta to the British Columbia coast to transport oilsands oil to Asian markets. The Northern Gateway project is in the midst of public hearings and is encountering a lot of opposition from First Nation groups.

"Frankly the reasons for developing the research and for developing the pipeline infrastructure needed to get it to market is so compelling for Canada and our trading partners that there's a much greater benefit here we need to stay focused on," said Bloom.